SB 410, passed by the 2015 Legislature, established a tax credit for individuals wishing to contribute to K-12 public schools and K-12 private, non-parochial schools. The bill calls for the program to be established in accordance with Article V, Section 11(5) and Article X, Section 6(1) of the Montana Constitution, which prohibit the direct or indirect appropriations or payment from any public fund to any sectarian or religious purpose. Accordingly, the Department of Revenue adopted rules that manage the program and exclude church-affiliated schools from participation.

Donations to both public and private K-12 schools were permitted in tax years 2016 and 2017. The tax credit program has several reporting requirements that are detailed in statute. Big Sky Scholarships, the only student scholarship organization in Montana at this time, conducted and documented an annual financial audit for 2016. However, much of the information required of private schools with students receiving scholarship proceeds is not yet available to the public including:

A listing of all qualified education providers that accepted scholarship funds from each student scholarship organization (15-30-3106(1)(b) MCA);

A statistical compilation of the information received from each student scholarship organization (15-30-3105(2)(a) MCA)

Summary information on donations to public K-12 schools during tax year 2016 can be viewed on the interactive map.

Click on the image to see current information about SB 410 donations for tax year 2018.

Synopsis and Current Status of SB410 Litigation (follow links for detailed case information):

Espinoza et al.: The case was heard in Flathead County District Court. Judge Heidi Ulbricht ruled in favor of the plaintiffs, permitting the tax credit to be applied toward private, parochial education. The Department of Revenue has appealed the decision to the Montana Supreme Court. Briefs in the appeal have been filed by both parties, with several amicus briefs submitted in favor of both positions. Oral arguments are scheduled for April 6, 2018. MQEC has been active in this case and has filed briefs in support of the Department of Revenue. (Updated March, 2018)

Armstrong et al.: The case was filed in Helena Federal District Court at the same time that Espinoza was filed. Judge Sam Haddon dismissed the case without prejudice, anticipating the resolution of Espinoza could address the Armstrong arguments. Armstrong et al. has appealed the dismissal to the U.S. Ninth Circuit Court of Appeals. Oral arguments were heard on March 6, 2018. MQEC is closely monitoring this case. (Updated March, 2018)

MQEC v. State of Montana and DoR: The case was filed in Lewis & Clark County District Court. The case is inactive at this time, pending resolution of Espinoza and/or Armstrong.

11/21/17: The American Civil Liberties Union, the ACLU of Montana, Americans United for Separation of Church and State, and the Anti-Defamation League file amicus curiae brief supporting the MT Department of Revenue's appeal to the Montana Supreme Court in Espinoza et al. Read the brief here.

10/27/16: The Montana Supreme Court denies MQEC's Petition for Writ of Supervisory Control and is in unanimous agreement that MQEC should be permitted to file an amicus brief at the District Court level. View the decision here.

9/26/16: The Montana Department of Revenue responds to the Petition for Writ of Supervisory Control, supporting MQEC's request for intervention. View the response here.

9/23/16: The Institute for Justice responds to the Petition for Writ of Supervisory Control, stating that intervention by MQEC will delay resolution of the proceeding.View the response here.

9/15/16: Judge David Ortley informs the Montana Supreme Courtthat he does not intend to respond to the Petition for Writ of Supervisory Control and that his original order sufficiently states his reasons for denying our motion to intervene. View the communication here.

8/25/16: The Montana Supreme Court orders (1) that all interested parties file a response to MQEC's Petition for Writ of Supervisory Control, and (2) that all proceedings in Espinoza et al are stayed (suspended) until the Petition for Writ of Supervisory Control is decided. View the order here.

8/19/16: MQEC files a Petition for Writ of Supervisory Control with the Montana Supreme Court, asking that Judge Ortley's decision be overturned and MQEC be allowed to intervene in Espinoza et al. View the petition and exhibits here.

8/4/16: Flathead District Court Judge David Ortley denies MQEC's Motion to Intervene in State suit (Espinoza et al.), finding "there is no basis [to] conclude that MQEC is either entitled to intervene or should be allowed to do so." View the order here.

7/6/16: Montana Department of Revenue responds to Plaintiffs' Motion for Summary Judgment, opposing the motion. The Department also files a Cross-Motion for Summary Judgment to enforce the Religious School Ban and dismiss the case. View the response, the cross-motion, and exhibits here.

5/13/16: Plaintiffs file Motion for Summary Judgment to permanently prevent enforcement of the Religious School Ban and dismiss the case. This would permit religious schools to receive distributions from student scholarship organizations. View the motion and brief here.

1/28/16: Plaintiffs file motion for preliminary injunction requesting the Court enjoin the Department of Revenue from enforcing Rule 1 re: exclusion of church-affiliated schools. View the motion and supporting brief, as well as the DoR's response.

12/16/15: Three plaintiffs file suit in Flathead County District Court against the MT Department of Revenue and Director Mike Kadas. Plaintiffs are represented by the Institute for Justice (Arlington, VA) and Holland & Hart, LLP (Billings, MT). View the complaint here.

12/15/15: Department of Revenue adopts final rules regarding administration of SB 410 tax credits. Parochial schools are not permitted to receive funds from school scholarship organizations. The adoption notice includes DoR responses to public comment from the November 5 hearing.

12/1/15: Results of Legislative Poll released. 89 legislators stated the proposed rules are contrary to legislative intent and 51 legislators stated the proposed rules are consistent with legislative intent.10 legislators did not respond to the poll. Individual votes on the poll are available here.

4/20/16: Armstrong et al. is dismissed without prejudice. This is not unusual when both a State suit and Federal suit address the same issue. The federal suit can be refiled if deemed necessary, after conclusion of the State suit. View the order here.

2/12/16: Plaintiffs file motion for preliminary injunction requesting the Court temporarily enjoin the Department of Revenue from enforcing the Religious School Ban. View the brief here.